Staff Reporter :
Bangladesh Bank (BB) has sought explanations from 13 banks for offering unusually high US dollar rates while collecting remittances from foreign exchange houses.
On December 19, the central bank issued a letter to the Managing Directors of BRAC Bank, Islami Bank Bangladesh, Shahjalal Islami Bank, Jamuna Bank, Trust Bank, Rupali Bank, Eastern Bank, Janata Bank, United Commercial Bank, NCC Bank, Mercantile Bank, City Bank, and Al-Arafah Islami Bank, requesting replies by December 22.
With the deadline expiring on Sunday, BB officials warned that action would be taken if any bank failed to provide a satisfactory explanation.
Some banks have claimed to have submitted their responses to Bangladesh Bank on Sunday. However, Husne Ara Shikha, Executive Director and Spokesperson for Bangladesh Bank, stated she was not aware of any submission.
“We submitted our explanation to the central bank today and will comply with regulatory instructions regarding the purchase of US dollars from foreign exchange houses,” said Mirza Elias Uddin Ahmed, Managing Director and CEO of Jamuna Bank.
He noted that pressure in the foreign exchange market had increased due to a rising number of letters of credit (LCs) being opened for commodities ahead of Ramadan.
Ahmed added that the bank has not been receiving enough foreign currency at the prevailing official rate and that, in some cases, foreign exchange houses contributed to the elevated US dollar rates.
A senior official from BRAC Bank also confirmed their institution had submitted an explanation to the central bank.
The official, speaking on condition of anonymity, highlighted that instability in the forex market had been caused by a lack of coordination between banks and the regulator.
They further explained that some banks had aggressively offered high rates to secure foreign currencies following the regulator’s recent directive to clear overdue LC payments.
Officials from City Bank’s treasury department also confirmed that they had submitted their explanation to the central bank.
A Bangladesh Bank official noted that the instability in the foreign exchange market had emerged this month after some banks began offering rates above the official level for the US dollar. While the official interbank exchange rate was around Tk 120 per US dollar, certain banks were offering Tk 127 to Tk 128 to foreign exchange houses, the official added.
